Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 101619 July 8, 1992

SANYO PHILIPPINES WORKERS UNION-PSSLU LOCAL CHAPTER NO. 109 AND/OR

ANTONIO DIAZ, PSSLU NATIONAL PRESIDENT, petitioners,
vs.
HON. POTENCIANO S. CANIZARES, in his capacity as Labor Arbiter, BERNARDO YAP,
RENATO BAYBON, SALVADOR SOLIBEL, ALLAN MISTERIO, EDGARDO TANGKAY,
LEONARDO DIONISIO, ARNEL SALVO, REYNALDO RICOHERMOSO, BENITO VALENCIA,
GERARDO LASALA AND ALEXANDER ATANASIO, respondents.

MEDIALDEA, J.:

This petition seeks to nullify: 1) the order of respondent Labor Arbiter Potenciano Cañizares dated
August 6, 1991 deferring the resolution of the motion to dismiss the complaint of private respondents
filed by petitioner Sanyo Philippines Workers Union-PSSLU Local Chapter No. 109 (PSSLU, for
brevity) on the ground that the labor arbiter had no jurisdiction over said complaint and 2) the order
of the same respondent clarifying its previous order and ruling that it had jurisdiction over the case.

The facts of the case are as follows:

PSSLU had an existing CBA with Sanyo Philippines Inc. (Sanyo, for short) effective July 1, 1989 to
June 30, 1994. The same CBA contained a union security clause which provided:

Sec. 2. All members of the union covered by this agreement must retain their
membership in good standing in the union as condition of his/her continued
employment with the company. The union shall have the right to demand from the
company the dismissal of the members of the union by reason of their voluntary
resignation from membership or willful refusal to pay the Union Dues or by reasons
of their having formed, organized, joined, affiliated, supported and/or aided directly or
indirectly another labor organization, and the union thus hereby guarantees and
holds the company free and harmless from any liability whatsoever that may arise
consequent to the implementation of the provision of this article. (pp. 5-6, Rollo)

In a letter dated February 7, 1990, PSSLU, through its national president, informed the management
of Sanyo that the following employees were notified that their membership with PSSLU were
cancelled for anti-union, activities, economic sabotage, threats, coercion and intimidation, disloyalty
and for joining another union: Benito Valencia, Bernardo Yap, Arnel Salvo, Renato Baybon, Eduardo
Porlaje, Salvador Solibel, Conrado Sarol, Angelito Manzano, Allan Misterio, Reynaldo Ricohermoso,
Mario Ensay and Froilan Plamenco. The same letter informed Sanyo that the same employees
refused to submit themselves to the union's grievance investigation committee (p. 53, Rollo). It
appears that many of these employees were not members of PSSLU but of another union, KAMAO.

On February 14, 1990, some officers of KAMAO, which included Yap, Salvo, Baybon, Solibel,
Valencia, Misterio and Ricohermoso, executed a pledged of cooperation with PSSLU promising
cooperation with the latter union and among others, respecting, accepting and honoring the CBA
between Sanyo and specifically:

1. That we shall remain officers and members of KAMAO until we finally decide to
rejoin Sanyo Phil. Workers Union-PSSLU;

2. That henceforth, we support and cooperate with the duly elected union officers of
Sanyo Phil. Workers Union-PSSLU in any and all its activities and programs to insure
industrial peace and harmony;

3. That we collectively accept, honor, and respect the Collective Bargaining

Agreement entered into between Sanyo Phil. Inc. and Sanyo Phil. Workers Union-
PSSLU dated February 7, 1990;

4 That we collectively promise not to engage in any activities inside company

premises contrary to law, the CBA and existing policies;

5 That we are willing to pay our individual agency fee in accordance with the
provision of the Labor Code, as amended;

6 That we collectively promise not to violate this pledge of cooperation. (p. 55, Rollo)

On March 4, 1991, PSSLU through its national and local presidents, wrote another letter to Sanyo
recommending the dismissal of the following non-union workers: Bernardo Yap, Arnel Salvo, Renato
Baybon, Reynaldo Ricohermoso, Salvador Solibel, Benito Valencia, and Allan Misterio, allegedly
because: 1) they were engaged and were still engaging in anti-union activities; 2) they willfully
violated the pledge of cooperation with PSSLU which they signed and executed on February 14,
1990; and 3) they threatened and were still threatening with bodily harm and even death the officers
of the union (pp. 37-38, Rollo).

Also recommended for dismissal were the following union members who allegedly joined, supported
and sympathized with a minority union, KAMAO: Gerardo Lasala, Legardo Tangkay, Alexander
Atanacio, and Leonardo Dionisio.

The last part of the said letter provided:

The dismissal of the above-named union members is without prejudice to receive

(sic) their termination pay if management decide (sic) to grant them benefits in
accordance with law. The union hereby holds the company free and harmless from
any liability that may arise consequent to the implementation by the company of our
recommendations for the dismissal of the above-mentioned workers.

It is however suggested that the Grievance Machinery be convened pursuant to

Section 3, Article XV of the Collective Bargaining Agreement (CBA) before their
actual dismissal from the company. (p. 38, Rollo)

Pursuant to the above letter of the union, the company sent a memorandum to the same workers
advising them that:

As per the attached letter from the local union President SPWU and the federation
President, PSSLU, requesting management to put the herein mentioned employees
on preventive suspension, effective immediately, preliminary to their subsequent
 dismissal, please be informed that the following employees are under preventive
suspension effective March 13, 1991 to wit:

1. Bernardo Yap
2. Renato Baybon
3. Salvador Solibel
4. Allan Misterio
5. Edgardo Tangkay
6. Leonardo Dionisio
7. Arnel Salvo
8. Reynaldo Ricohermoso
9. Benito Valencia
10. Gerardo Lasala
11. Alexander Atanacio

The above listed employees shall not be allowed within company premises without
the permission of management.

As per request of the union's letter to management, should the listed employees fail
to appeal the decision of the union for dismissal, then effective March 23, 1991, said
listed employees shall be considered dismissed from the company. (p 39, Rollo)

The company received no information on whether or not said employees appealed to PSSLU.
Hence, it considered them dismissed as of March 23, 1991 (p. 40, Rollo).

On May 20, 1991, the dismissed employees filed a complaint (pp. 32-35, Rollo) with the NLRC for
illegal dismissal. Named respondent were PSSLU and Sanyo.

On June 20, 1991, PSSLU filed a motion to dismiss the complaint alleging that the Labor Arbiter was
without jurisdiction over the case, relying on Article 217 (c) of P.D. 442, as amended by Section 9 of
Republic Act No. 6715 which provides that cases arising from the interpretation or implementation of
the collective bargaining agreements shall be disposed of by the labor arbiter by referring the same
to the grievance machinery and voluntary arbitration.

The complainants opposed the motion to dismiss complaint on these grounds: 1) the series of
conferences before the National Conciliation and Mediation Board had been terminated; 2) the
NLRC Labor Arbiter had jurisdiction over the case which was a termination dispute pursuant to
Article 217 (2) of the Labor Code; and 3) there was nothing in the CBA which needs interpretation or
implementation (pp. 44-46, Rollo).

On August 7, 1991, the respondent Labor Arbiter issued the first questioned order. It held that:

xxx xxx xxx

While there are seemingly contradictory provisions in the aforecited article of the
Labor Code, the better interpretation will be to give effect to both, and termination
dispute being clearly spelled as falling under the jurisdiction of the Labor Arbiter, the
same shall be respected. The jurisdiction of the grievance machinery and voluntary
arbitration shall cover other controversies.

However, the resolution of the instant issue shall be suspended until both parties
have fully presented their respective positions and the said issue shall be included in
the final determination of the above-captioned case.
 WHEREFORE, the instant Motions to Dismiss are hereby held pending.

Consequently, the parties are hereby directed to submit their position papers and
supporting documents pursuant to Section 2, Rule VII of the Rules of the
Commission on or before the hearing on the merit of this case scheduled on August
29, 1991 at 11:00 a.m. (p. 23, Rollo)

On August 27, 1991, PSSLU filed another motion to resolve motion to dismiss complaint with a
prayer that the Labor Arbiter resolve the issue of jurisdiction.

On September 4, 1991, the respondent Labor Arbiter issued the second questioned order which held
that it was assuming jurisdiction over the complaint of private respondents, in effect, holding that it
had jurisdiction over the case.

On September 19, 1991, PSSLU filed this petition alleging that public respondent Labor Arbiter
cannot assume jurisdiction over the complaint of public respondents because it had no jurisdiction
over the dispute subject of said complaint. It is their submission that under Article 217 (c) of the
Labor Code, in relation to Article 261 thereof, as well as Policy Instruction No. 6 of the Secretary of
Labor, respondent Arbiter has no jurisdiction and authority to take cognizance of the complaint
brought by private respondents which involves the implementation of the union security clause of the
CBA. The function of the Labor Arbiter under the same law and rule is to refer this case to the
grievance machinery and voluntary arbitration.

In its comment, private respondents argue that Article 217(a) 2 and 4 of the Labor Code is explicit, to
wit:

Art. 217. Jurisdiction of the Labor Arbiters and the Commission.

a) Except as otherwise provided under this Code, the Labor Arbiters shall have
original and exclusive jurisdiction to hear and decide . . . the following cases involving
all workers, . . . :

xxx xxx xxx

2) Termination disputes,

xxx xxx xxx

4) Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations.

The private respondents also claimed that insofar as Salvo, Baybon, Ricohermoso, Solibel,
Valencia, Misterio and Lasala were concerned, they joined another union, KAMAO during the
freedom period which commenced on May 1, 1989 up to June 30, 1989 or before the effectivity of
the July 1, 1989 CBA. Hence, they are not covered by the provisions of the CBA between Sanyo and
PSSLU. Private respondents Tangkay, Atanacio and Dionisio admit that in September 1989, they
resigned from KAMAO and rejoined PSSLU (pp.
66(a)-68, Rollo).

For its part, public respondent, through the Office of the Solicitor General, is of the view that a
distinction should be made between a case involving "interpretation or implementation of collective
bargaining agreement or "interpretation" or "enforcement" of company personnel policies, on the one
hand and a case involving termination, on the other hand. It argued that the case at bar does not
involve an "interpretation or implementation" of a collective bargaining agreement or "interpretation
or enforcement" of company policies but involves a "termination." Where the dispute is just in the
interpretation, implementation or enforcement stage, it may be referred to the grievance machinery
set up in the CBA or by voluntary arbitration. Where there was already actual
termination, i.e., violation of rights, it is already cognizable by the Labor Arbiter.

Article 217 of the Labor Code defines the jurisdiction of the Labor Arbiter.

Art. 217. Jurisdiction of Labor Arbiters and the Commission. a) Except as otherwise

provided under this Code the Labor Arbiters shall have original and exclusive
jurisdiction to hear and decide within thirty (30) calendar days after the submission of
the case by the parties for decision without extension even in the absence of
stenographic notes, the following cases involving all workers, whether agricultural or
non-agricultural:

1. Unfair labor practice cases;

2. Termination disputes;

3. If accompanied with a claim for reinstatement, those cases that workers may file
involving wages, rates of pay, hours of work and other terms and conditions of
employment;

4. Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;

5. Cases arising from any violation of Article 264 of this Code, including questions
involving the legality of strikes and lockouts;

6. Except claims for Employees Compensation, Social Security, Medicare and

maternity benefits, all other claims, arising from employer-employee relations,
including those of persons in domestic or household service, involving an amount
exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with
a claim for reinstatement.

(b) The Commission shall have exclusive appellate jurisdiction over all cases decided
by Labor Arbiters.

(c) Cases arising from the interpretation or implementation of collective bargaining

agreements and those arising from the interpretation or enforcement of company
personnel policies shall be disposed of by the Labor Arbiter by referring the same to
the grievance machinery and voluntary arbitration as may be provided in said
agreements.

It is clear from the above article that termination cases fall under the jurisdiction of the Labor Arbiter.
It should be noted however that said article at the outset excepted from the said provision cases
otherwise provided for in other provisions of the same Code, thus the phrase "Except as otherwise
provided under this Code . . . ." Under paragraph (c) of the same article, it is expressly provided that
"cases arising from the interpretation or implementation of collective bargaining agreements and
those arising from the interpretation and enforcement of company personnel policies shall be
disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary
arbitration as may be provided in said agreements.
It was provided in the CBA executed between PSSLU and Sanyo that a member's voluntary
resignation from membership, willful refusal to pay union dues and his/her forming, organizing,
joining, supporting, affiliating or aiding directly or indirectly another labor union shall be a cause for it
to demand his/her dismissal from the company. The demand for the dismissal and the actual
dismissal by the company on any of these grounds is an enforcement of the union security clause in
the CBA. This act is authorized by law provided that enforcement should not be characterized by
arbitrariness (Manila Mandarin Employee Union v. NLRC, G.R. No. 76989, 29 Sept. 1987, 154
SCRA 368) and always with due process (Tropical Hut Employees Union v. Tropical Food Market,
Inc., L-43495-99, Jan. 20, 1990).

The reference to a Grievance Machinery and Voluntary Arbitrators for the adjustment or resolution of
grievances arising from the interpretation or implementation of their CBA and those arising from the
interpretation or enforcement of company personnel policies is mandatory. The law grants to
voluntary arbitrators original and exclusive jurisdiction to hear and decide all unresolved grievances
arising from the interpretation or implementation of the Collective Bargaining Agreement and those
arising from the interpretation or enforcement of company personnel policies (Art. 261, Labor Code).

In its order of September 4, 1991, respondent Labor Arbiter explained its decision to assume
jurisdiction over the complaint, thus:

The movants failed to show (1) the provisions of the CBA to be implemented, and (2)
the grievance machinery and voluntary arbitrator already formed and properly
named. What self-respecting judge would refer a case from his responsibility to a
shadow? To whom really and specifically shall the case be indorsed or referred? In
brief, they could have shown the (1) existence of the grievance machinery and (2) its
being effective.

Furthermore, the aforecited law merely directs the "referral" cases. It does not
expressly confer jurisdiction on the grievance machinery or voluntary arbitration
panel, created or to be created. Article 260 of the Labor Code describes the
formation of the grievance and voluntary arbitration. All this of course shall be on
voluntary basis. Is there another meaning of voluntary arbitration? (The herein
complainant have strongly opposed the motion to dismiss. Would they go willingly to
the grievance machinery and voluntary arbitration which are installed by their
opponents if directed to do so?) (p. 26, Rollo)

The failure of the parties to the CBA to establish the grievance machinery and its unavailability is not
an excuse for the Labor Arbiter to assume jurisdiction over disputes arising from the implementation
and enforcement of a provision in the CBA. In the existing CBA between PSSLU and Sanyo, the
procedure and mechanics of its establishment had been clearly laid out as follows:

ARTICLE XV — GRIEVANCE MACHINERY

Sec. 1. Whenever any controversy should arise between the company and the union
as to the interpretation or application of the provision of this agreement, or whenever
any difference shall exist between said parties relative to the terms and conditions of
employment, an earnest effort shall be made to settle such controversy in
substantially the following manner:

First step. (Thru Grievance) The dispute shall initially be resolved by conference
between the management to be represented by the Management's authorized
representatives on the one hand, and the Union to be represented by a committee
composed of the local union president and one of the local union officer appointed by
the local union president, on the other hand within three days from date of
 concurrence of grievance action. In the absence of the local union president, he
(shall) appoint another local union officer to take over in his behalf. Where a
controversy personally affects an employee, he shall not be allowed to be a member
of the committee represented by the union.

Second step. (Thru Arbitrator mutually chosen) Should such dispute remain unsettled
after twenty (20) days from the first conference or after such period as the parties
may agree upon in specified cases, it shall be referred to an arbitrator chosen by the
consent of the company and the union. In the event of failure to agree on the choice
of voluntary arbitrator, the National Conciliation and Mediation Board, Department of
Labor and Employment shall be requested to choose an Arbitrator in accordance
with voluntary arbitration procedures.

Sec. 2. The voluntary Arbitrator shall have thirty (30) days to decide the issue
presented to him and his decision shall be final, binding and executory upon the
parties. He shall have no authority to add or subtract from and alter any provision of
this agreement. The expenses of voluntary arbitration including the fee of the
arbitrator shall be shared equally by the company and the union. In the event the
arbitrator chosen either by the mutual agreement of the company and the union by
(the) way of voluntary arbitration or by the National Conciliation and Mediation Board
(NCMB) failed to assume his position, died, become disabled or any other manner
failed to function and or reach a decision, the company and the union shall by mutual
agreement choose another arbitrator; in the event of failure to agree on the choice of
a new voluntary arbitrator, the matter shall again be referred back to the NCMB who
shall be requested again to choose a new arbitrator as above provided. Any
grievance not elevated or processed as above provided within the stipulated period
shall be deemed settled and terminated.

Sec. 3. It is hereby agreed that decisions of the union relative to their members, for
implementation by the COMPANY, should be resolved for review thru the Grievance
Machinery; and management be invited to participate in the Grievance procedure to
be undertaken by the union relative to (the) case of the union against members. (pp.
134-135, Rollo)

All that needs to be done to set the machinery into motion is to call for the convening thereof. If the
parties to the CBA had not designated their representatives yet, they should be ordered to do so.

The procedure introduced in RA 6715 of referring certain grievances originally and exclusively to the
grievance machinery and when not settled at this level, to a panel of voluntary arbitrators outlined in
CBA's does not only include grievances arising from the interpretation or implementation of the CBA
but applies as well to those arising from the implementation of company personnel policies. No other
body shall take cognizance of these cases. The last paragraph of Article 261 enjoins other bodies
from assuming jurisdiction thereof:

The commission, its Regional Offices and the Regional Directors of the Department
of Labor and Employment shall not entertain disputes, grievances or matters under
the exclusive and original jurisdiction of the Voluntary Arbitrator or panel of voluntary
arbitrators and shall immediately dispose and refer the same to the grievance
machinery or voluntary arbitration provided in the Collective Bargaining Agreement.

In the instant case, however, We hold that the Labor Arbiter and not the Grievance Machinery
provided for in the CBA has the jurisdiction to hear and decide the complaints of the private
respondents. While it appears that the dismissal of the private respondents was made upon the
recommendation of PSSLU pursuant to the union security clause provided in the CBA, We are of the
opinion that these facts do not come within the phrase "grievances arising from the interpretation or
implementation of (their) Collective Bargaining Agreement and those arising from the interpretation
or enforcement of company personnel policies," the jurisdiction of which pertains to the Grievance
Machinery or thereafter, to a voluntary arbitrator or panel of voluntary arbitrators. Article 260 of the
Labor Code on grievance machinery and voluntary arbitrator states that "(t)he parties to a Collective
Bargaining Agreement shall include therein provisions that will ensure the mutual observance of its
terms and conditions. They shall establish a machinery for the adjustment and resolution of
grievances arising from the interpretation or implementation of their Collective Bargaining Agreement
and those arising from the interpretation or enforcement of company personnel policies." It is further
provided in said article that the parties to a CBA shall name or designate their respective
representatives to the grievance machinery and if the grievance is not settled in that level, it shall
automatically be referred to voluntary arbitrators (or panel of voluntary arbitrators) designated in
advance by the parties. It need not be mentioned that the parties to a CBA are the union and the
company. Hence, only disputes involving the union and the company shall be referred to the
grievance machinery or voluntary arbitrators.

In the instant case, both the union and the company are united or have come to an agreement
regarding the dismissal of private respondents. No grievance between them exists which could be
brought to a grievance machinery. The problem or dispute in the present case is between the union
and the company on the one hand and some union and non-union members who were dismissed,
on the other hand. The dispute has to be settled before an impartial body. The grievance machinery
with members designated by the union and the company cannot be expected to be impartial against
the dismissed employees. Due process demands that the dismissed workers grievances be
ventilated before an impartial body. Since there has already been an actual termination, the matter
falls within the jurisdiction of the Labor Arbiter.

ACCORDINGLY, the petition is DISMISSED. Public respondent Labor Arbiter is directed to resolve
the complaints of private respondents immediately.

SO ORDERED.

Cruz, Griño-Aquino and Bellosillo, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 120319 October 6, 1995

LUZON DEVELOPMENT BANK, petitioner,

vs.
ASSOCIATION OF LUZON DEVELOPMENT BANK EMPLOYEES and ATTY. ESTER S. GARCIA
in her capacity as VOLUNTARY ARBITRATOR, respondents.

ROMERO, J.:

From a submission agreement of the Luzon Development Bank (LDB) and the Association of Luzon
Development Bank Employees (ALDBE) arose an arbitration case to resolve the following issue:

Whether or not the company has violated the Collective Bargaining Agreement
provision and the Memorandum of Agreement dated April 1994, on promotion.

At a conference, the parties agreed on the submission of their respective Position Papers on
December 1-15, 1994. Atty. Ester S. Garcia, in her capacity as Voluntary Arbitrator, received
ALDBE's Position Paper on January 18, 1995. LDB, on the other hand, failed to submit its Position
Paper despite a letter from the Voluntary Arbitrator reminding them to do so. As of May 23, 1995 no
Position Paper had been filed by LDB.

On May 24, 1995, without LDB's Position Paper, the Voluntary Arbitrator rendered a decision
disposing as follows:

WHEREFORE, finding is hereby made that the Bank has not adhered to the
Collective Bargaining Agreement provision nor the Memorandum of Agreement on
promotion.

Hence, this petition for certiorari and prohibition seeking to set aside the decision of the Voluntary
Arbitrator and to prohibit her from enforcing the same.

In labor law context, arbitration is the reference of a labor dispute to an impartial third person for
determination on the basis of evidence and arguments presented by such parties who have bound
themselves to accept the decision of the arbitrator as final and binding.

Arbitration may be classified, on the basis of the obligation on which it is based, as either
compulsory or voluntary.

Compulsory arbitration is a system whereby the parties to a dispute are compelled by the
government to forego their right to strike and are compelled to accept the resolution of their dispute
through arbitration by a third party.1 The essence of arbitration remains since a resolution of a
dispute is arrived at by resort to a disinterested third party whose decision is final and binding on the
parties, but in compulsory arbitration, such a third party is normally appointed by the government.

Under voluntary arbitration, on the other hand, referral of a dispute by the parties is made, pursuant
to a voluntary arbitration clause in their collective agreement, to an impartial third person for a final
and binding resolution.2 Ideally, arbitration awards are supposed to be complied with by both parties
without delay, such that once an award has been rendered by an arbitrator, nothing is left to be done
by both parties but to comply with the same. After all, they are presumed to have freely chosen
arbitration as the mode of settlement for that particular dispute. Pursuant thereto, they have chosen
a mutually acceptable arbitrator who shall hear and decide their case. Above all, they have mutually
agreed to de bound by said arbitrator's decision.

In the Philippine context, the parties to a Collective Bargaining Agreement (CBA) are required to
include therein provisions for a machinery for the resolution of grievances arising from the
interpretation or implementation of the CBA or company personnel policies. 3 For this purpose,
parties to a CBA shall name and designate therein a voluntary arbitrator or a panel of arbitrators, or
include a procedure for their selection, preferably from those accredited by the National Conciliation
and Mediation Board (NCMB). Article 261 of the Labor Code accordingly provides for exclusive
original jurisdiction of such voluntary arbitrator or panel of arbitrators over (1) the interpretation or
implementation of the CBA and (2) the interpretation or enforcement of company personnel policies.
Article 262 authorizes them, but only upon agreement of the parties, to exercise jurisdiction over
other labor disputes.

On the other hand, a labor arbiter under Article 217 of the Labor Code has jurisdiction over the
following enumerated cases:

. . . (a) Except as otherwise provided under this Code the Labor Arbiters shall have
original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days
after the submission of the case by the parties for decision without extension, even in
the absence of stenographic notes, the following cases involving all workers, whether
agricultural or non-agricultural:

1. Unfair labor practice cases;

2. Termination disputes;

3. If accompanied with a claim for reinstatement, those cases that workers may file
involving wages, rates of pay, hours of work and other terms and conditions of
employment;

4. Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;

5. Cases arising from any violation of Article 264 of this Code, including questions
involving the legality of strikes and lockouts;

6. Except claims for Employees Compensation, Social Security, Medicare and

maternity benefits, all other claims, arising from employer-employee relations,
including those of persons in domestic or household service, involving an amount
exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with
a claim for reinstatement.

xxx xxx xxx

It will thus be noted that the jurisdiction conferred by law on a voluntary arbitrator or a panel of such
arbitrators is quite limited compared to the original jurisdiction of the labor arbiter and the appellate
jurisdiction of the National Labor Relations Commission (NLRC) for that matter. 4 The state of our
present law relating to voluntary arbitration provides that "(t)he award or decision of the Voluntary
Arbitrator . . . shall be final and executory after ten (10) calendar days from receipt of the copy of the
award or decision by the parties," 5 while the "(d)ecision, awards, or orders of the Labor Arbiter are
final and executory unless appealed to the Commission by any or both parties within ten (10)
calendar days from receipt of such decisions, awards, or orders." 6 Hence, while there is an express
mode of appeal from the decision of a labor arbiter, Republic Act No. 6715 is silent with respect to
an appeal from the decision of a voluntary arbitrator.

Yet, past practice shows that a decision or award of a voluntary arbitrator is, more often than not,
elevated to the Supreme Court itself on a petition for certiorari,7 in effect equating the voluntary
arbitrator with the NLRC or the Court of Appeals. In the view of the Court, this is illogical and
imposes an unnecessary burden upon it.

In Volkschel Labor Union, et al. v. NLRC, et al.,8 on the settled premise that the judgments of courts
and awards of quasi-judicial agencies must become final at some definite time, this Court ruled that
the awards of voluntary arbitrators determine the rights of parties; hence, their decisions have the
same legal effect as judgments of a court. In Oceanic Bic Division (FFW), et al. v. Romero, et
al.,9 this Court ruled that "a voluntary arbitrator by the nature of her functions acts in a quasi-judicial
capacity." Under these rulings, it follows that the voluntary arbitrator, whether acting solely or in a
panel, enjoys in law the status of a quasi-judicial agency but independent of, and apart from, the
NLRC since his decisions are not appealable to the latter. 10

Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902, provides that the Court of
Appeals shall exercise:

xxx xxx xxx

(B) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions,
orders or awards of Regional Trial Courts and quasi-judicial agencies,
instrumentalities, boards or commissions, including the Securities and Exchange
Commission, the Employees Compensation Commission and the Civil Service
Commission, except those falling within the appellate jurisdiction of the Supreme
Court in accordance with the Constitution, the Labor Code of the Philippines under
Presidential Decree No. 442, as amended, the provisions of this Act, and of
subparagraph (1) of the third paragraph and subparagraph (4) of the fourth
paragraph of Section 17 of the Judiciary Act of 1948.

xxx xxx xxx

Assuming arguendo that the voluntary arbitrator or the panel of voluntary arbitrators may not strictly
be considered as a quasi-judicial agency, board or commission, still both he and the panel are
comprehended within the concept of a "quasi-judicial instrumentality." It may even be stated that it
was to meet the very situation presented by the quasi-judicial functions of the voluntary arbitrators
here, as well as the subsequent arbitrator/arbitral tribunal operating under the Construction Industry
Arbitration Commission,11 that the broader term "instrumentalities" was purposely included in the
above-quoted provision.

An "instrumentality" is anything used as a means or agency.12 Thus, the terms governmental

"agency" or "instrumentality" are synonymous in the sense that either of them is a means by which a
government acts, or by which a certain government act or function is performed. 13 The word
"instrumentality," with respect to a state, contemplates an authority to which the state delegates
governmental power for the performance of a state function. 14 An individual person, like an
administrator or executor, is a judicial instrumentality in the settling of an estate, 15 in the same
manner that a sub-agent appointed by a bankruptcy court is an instrumentality of the court, 16 and a
trustee in bankruptcy of a defunct corporation is an instrumentality of the state. 17
The voluntary arbitrator no less performs a state function pursuant to a governmental power
delegated to him under the provisions therefor in the Labor Code and he falls, therefore, within the
contemplation of the term "instrumentality" in the aforequoted Sec. 9 of B.P. 129. The fact that his
functions and powers are provided for in the Labor Code does not place him within the exceptions to
said Sec. 9 since he is a quasi-judicial instrumentality as contemplated therein. It will be noted that,
although the Employees Compensation Commission is also provided for in the Labor Code, Circular
No. 1-91, which is the forerunner of the present Revised Administrative Circular No. 1-95, laid down
the procedure for the appealability of its decisions to the Court of Appeals under the foregoing
rationalization, and this was later adopted by Republic Act No. 7902 in amending Sec. 9 of B.P. 129.

A fortiori, the decision or award of the voluntary arbitrator or panel of arbitrators should likewise be
appealable to the Court of Appeals, in line with the procedure outlined in Revised Administrative
Circular No. 1-95, just like those of the quasi-judicial agencies, boards and commissions enumerated
therein.

This would be in furtherance of, and consistent with, the original purpose of Circular No. 1-91 to
provide a uniform procedure for the appellate review of adjudications of all quasi-judicial entities 18 not
expressly excepted from the coverage of Sec. 9 of B.P. 129 by either the Constitution or another
statute. Nor will it run counter to the legislative intendment that decisions of the NLRC be reviewable
directly by the Supreme Court since, precisely, the cases within the adjudicative competence of the
voluntary arbitrator are excluded from the jurisdiction of the NLRC or the labor arbiter.

In the same vein, it is worth mentioning that under Section 22 of Republic Act No. 876, also known
as the Arbitration Law, arbitration is deemed a special proceeding of which the court specified in the
contract or submission, or if none be specified, the Regional Trial Court for the province or city in
which one of the parties resides or is doing business, or in which the arbitration is held, shall have
jurisdiction. A party to the controversy may, at any time within one (1) month after an award is made,
apply to the court having jurisdiction for an order confirming the award and the court must grant such
order unless the award is vacated, modified or corrected. 19

In effect, this equates the award or decision of the voluntary arbitrator with that of the regional trial
court. Consequently, in a petition for certiorari from that award or decision, the Court of Appeals
must be deemed to have concurrent jurisdiction with the Supreme Court. As a matter of policy, this
Court shall henceforth remand to the Court of Appeals petitions of this nature for proper disposition.

ACCORDINGLY, the Court resolved to REFER this case to the Court of Appeals.

SO ORDERED.

Padilla, Regalado, Davide, Jr., Bellosillo, Puno, Vitug, Kapunan, Mendoza, Francisco and
Hermosisima, Jr., JJ., concur.

Feliciano, J., concurs in the result.

Narvasa, C.J. and Melo, J. are on leave.